Earn a projected 4.5 - 6.5% tax-free with an Innovative Finance ISA1

You can earn stable returns while supporting the UK economy with an Innovative Finance ISA.

Capital at risk. Your actual return may be higher or lower. Tax rules depend on your circumstances and may change. Not covered by the Financial Services Compensation Scheme.

  • Stable returns with a tax-free IFISA
  • Choose a lending option to suit you
  • Lend easily with automatic tools
  • No fees to access your money
  • Support 100s of British businesses

90,000 investors have lent £6.2 billion through Funding Circle, earning £329 million in interest.3

£6.2 billion
Lent to UK businesses since 2010

What is an Innovative Finance ISA?

Boost your returns with tax-free interest

Innovative Finance ISAs are accounts that let you earn tax-free returns through online or peer-to-peer lending.2.

A new type of ISA for online lending

The Funding Circle ISA is an Innovative Finance ISA where you earn tax-free returns by lending to businesses across the UK. You can earn attractive returns without the volatility that can occur when investing in stocks and shares.

Make the most of your tax-free allowance

This tax year you have a subscription of £20,000 which can be split between a Cash ISA, Stocks & Shares ISA, Lifetime ISA, and Innovative Finance ISA. Your tax-free entitlement depends on your circumstances and may change.

The Telegraph
Funding Circle has been the most lucrative [peer-to-peer platform]. Since I joined in August 2012, drip feeding cash in, my returns, after all fees and bad debt adjustment, have been 6.2pc.
Martin Lewis, writing in The Daily Telegraph, 2013

How do Innovative Finance ISAs work?

With the Funding Circle Innovative Finance ISA you lend to a range of established, small British businesses. They get the funds to grow, and you can earn attractive returns as they pay you back each month.

Choose your lending option

To help you get the return you’re looking for, you can choose between two lending options. You can switch options at any time by logging in online.


4.5 - 6.5% 1
Projected return
  • You lend to the full range of creditworthy businesses to build a balanced portfolio
  • This option has a higher projected return, with a higher estimated bad debt rate


4.3 - 4.7% 1
Projected return
  • You only lend to creditworthy businesses that have been assessed as lower risk
  • This option has a lower projected return, with a lower estimated bad debt rate

Whichever lending option you choose, you'll automatically lend your funds to relevant businesses. We'll also collect and reinvest your monthly repayments.

  1. The rates shown are the annual projected returns, after fees and bad debts but before tax, that a diversified investor could earn with either lending option. Your actual return may be higher or lower than projected, for example due to the performance of the individual loans your funds are matched with, or a change in macroeconomic conditions. By lending to businesses your capital is at risk. Not covered by the Financial Services Compensation Scheme. See the full calculation here.
  2. Interest earned is after fees and bad debt, but before tax.

Set up an Innovative Finance ISA

The Funding Circle Innovative Finance ISA works just like our Classic account. With an easy-to-use online account, automatic tools and fantastic investor support, earning attractive and stable returns is quick and simple.

  1. Open your online account

    Set up your account in minutes and transfer money from your debit card.

  2. Start lending automatically

    Our automatic lending tool allows you to lend small amounts to hundreds of different businesses.

  3. Receive monthly repayments

    You’ll typically receive repayments with interest each month from the businesses you’ve lent to.

  4. Repayments are reinvested

    By keeping our lending tool switched on, your repayments will then be lent out again to help maximise your earnings.

Here to help if you need us

Call or email our experienced team and they can answer any questions you have.

020 7401 9111

Need help? Call us

Limits and transfers

Annual subscription

You can only open one Innovative Finance ISA in any tax year. There is a subscription limit of £20,000 this tax year, which you can split across all types of ISA.

ISA transfers

Earn even more by transferring your balance from other ISA providers. Simply login to your account to print an ISA transfer form. Read more here.

Minimum investment

To help you build a well diversified portfolio for a more stable return, we suggest lending £2,000 or more. If you’d like to start with less, the minimum initial transfer is £1,000.

Watch how lending through an Innovative Finance ISA works, and how you can help businesses across the UK.

Accessing your funds

Your funds will be lent to businesses who borrow over 6 months to 5 years, but you have options to access your money at any stage. When you’re ready you have two options:

Withdraw as you go

Turn off reinvesting and withdraw your repayments as they come in.

Withdraw a lump sum

Select the amount you’d like to withdraw, and sell your active loans to other investors using our automatic selling tool.

If you want to transfer your Innovative Finance ISA to another provider, you must sell your loans first and transfer the cash raised. Any loans that cannot be sold may no longer be eligible for tax-free interest. Please read our FAQs for more detail.

When a loan part is sold, a 1.25% transfer payment is paid to the buyer by the seller. For example, a £20 loan part is sold for £19.75. The time it takes to sell may vary as it depends on demand from other investors looking to buy at the time. You can only sell active loans with no credit issues, and not in the last month of their term.

Innovative Finance ISA rules and comparison

What are the differences between all ISAs and Innovative Finance ISAs?

All ISAs:

  • You have a subscription of £20,000 this year which can be split across all ISA types
  • You must be 18+ years of age and a UK resident
  • You need a National Insurance number to apply
  • You can only subscribe to one Innovative Finance ISA per year

The Funding Circle Innovative Finance ISA:

  • The Funding Circle IFISA is a flexi ISA. Under ISA rules you can take your money out of your ISA account and put it back later in the same tax year, without losing your tax-free entitlement.
  • The Funding Circle Innovative Finance ISA requires a minimum initial investment of £1,000
  • You cannot transfer funds directly from a Classic account to an Innovative Finance ISA account. You must first sell your loans, then transfer the money raised into your ISA account.
  • You can earn even more by transferring your balance from other ISA providers. Simply login to your account to print an ISA transfer form. Read more here.
  • In the unlikely event that Funding Circle goes out of business, you would continue to receive repayments for your loans and our back-up service provider would administer the Innovative Finance ISA for you.

How do we manage risk?

Only established businesses who have passed our rigorous credit assessment process can borrow through Funding Circle. However, it’s important to remember that some businesses will not be able to fully repay their loan. We call this a bad debt, and it’s already accounted for in your projected return.

Diversification is the best way to manage risk. This simply means spreading your lending across hundreds of businesses, lending small amounts to each one. To help you build a well diversified portfolio for a more stable return, we suggest lending £2,000 or more. If you’d like to start with less, the minimum initial transfer is £1,000.

We’re here to help

Get in touch with our support team for help or more information.

020 7401 9111

Need help? Give us a call.